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I'm not a Bitcoin maximalist, and I agree with your point about mining pools. I just think PoS is centralization with extra steps with fewer steps than PoW.

sanderjd 5y ago
I didn't totally mean that you personally are a Bitcoin maximalist, just that this is one of their arguments. Did you mean extra steps or fewer? Either way, I think it mostly remains to be seen on the centralization question. The newer-fangled PoS chains are certainly more centralized than Bitcoin or Ethereum, but nobody has actually tried distributing tokens broadly through a bunch of years of PoW and only then switching to PoS. It could plausibly end up being quite a bit more decentralized than Bitcoin.
- camgunz 5y ago
  > Did you mean extra steps or fewer? Eh I was trying to be extra clever but, that's practically a synonym for being opaque. To zoom out a little, I just think these systems have a kind of reverse entropy. Think about all the "decentralized" systems we started off with: email, newsgroups, payments, web apps, State government in the US. They kind of congeal into walled gardens, one and all, and that's probably because frog boiling is very easy (give up an imperceptible amount of control for a hugely perceptible amount of convenience) and the end goal is very profitable. Like, any company would love to be able to scan every Gmail user's email for ad leads. Holy shit. And we let that happen because of... idk search, anti-spam and storage so large you never have to think about it. Maybe a good deal, honestly, I don't know. And we're seeing this happen in crypto right? The pitch of literally every crypto service is "simple and you'll get rich". Well this is the same thing: people are giving up imperceptible levels of control for super perceptible levels of convenience. And sure, that's their choice. And we can laugh in people's faces when they get rug pulled saying "not your keys not your crypto" but that's not gonna win us any friends. And we'll be laughing while the blockchains centralize (as they are already doing, right now). So I think PoW is centralization with extra steps. I think PoS is also centralization with extra steps, but the huge buy-in bakes centralization in right at the beginning, so it's fewer steps than PoW. Crypto was supposed to democratize money and payments! Why is there a $130k entrance fee? And then for those who can't afford that, how many of them will really band together to buy stake shares? How much of that will be a scam? How much of that will be big conglomerates who actually run the nodes, give you your 2% return, but meanwhile they've seized control of the Ethereum network, all while you funded it! So if we're taking crypto's values earnestly, I really do think we have to see PoS as an acceleration towards centralization and a big step backwards. ~~~ I can't even get excited about some potential positive outcomes (PoS happening, energy use declining, centralization also happening, crypto dying, switches to PoS causing schisms, crypto dying, nations banning crypto mining, crypto dying) because so many good, honest people have been hoodwinked into this bonkers scheme and they'll lose so, so much money. And honestly, for what? So banks can't stop you from making an ACH transfer for weed? Seriously, just get out there and vote already. ~~~ Broadly I think this a problem with the fundamental libertarian underpinnings of blockchain currencies. They sort of presuppose that everyone starts from the same place, and then you're rewarded in line with what you contribute to the network. But in the world we live in, there's huge inequality--we absolutely do not start from the same place. So unless your protocol has some mechanism to even things out, it'll just reproduce that inequality. And that inequality has a lot of second order effects. Rich people can buy a lot of mining or a lot of stake. They can afford to start businesses like exchanges or crypto news websites (or buy them after they get popular). They can afford to buy ads pumping their coin, or astroturf campaigns against changes they don't like. They can build services on the chain and collect rent. Same as it ever was. There's this whole conundrum in progressive politics about why some people so consistently vote against their own self interest. There's a lot of reasons, but one I thought was just absolutely wrong was "well, everyone thinks they'll be rich someday"--so they vote against taxes and regulation and such. But that is 100% the dynamic in crypto right now. I honestly don't see any positive outcome from any of this, I really don't.
  - sanderjd 5y ago
    This is an interesting comment, thanks! Just to say one thing: something I like about PoS is that it forces validators to keep skin in the game. If validators do anything that screws with the legitimacy of the protocol (like big validators getting together to collude on some nefarious action) then that will affect the value of the asset that they are forced to hold in order to be a validator. So they have an incentive to run the network in the way users expect. FWIW: there is a good (in my view) decentralized staking protocol called RocketPool just launched, which I hope will be popular among those who don't have $130k.
    - camgunz 5y ago
      Yeah, that is a big difference between PoS vs. PoW where damaging the network damages you a lot more financially. You can cash out PoW earnings more or less immediately and then corrupt the network, whereas with PoS your stake is what lets you corrupt it. Someone else linked a thread that was like, "the buy-in for PoW is pretty high too, you gotta burn $15k-$25k on an ASIC mining rig...", but that's obviously peanuts compared to $130k. I'm not so sure it's a given that corrupting the network outright destroys it though. That defense mechanism assumes at least a few things: - Enough people would notice - Enough of those people would sell their ETH as a result - Enough of those people would sell enough of their ETH I think it's pretty plausible some off-chain action would occur instead, like a fork or some governance issue. It seems unlikely that the majority of ETH holders would participate in a mass sell-off that would bankrupt many (most?) of them, to say nothing of the social (my whole life is ETH) and investment (my whole business and the businesses/careers of all my friends are ETH) costs. You could also imagine a conglomerate doing this for "noble" reasons. "We reversed transaction Y because they're child pornographers" or whatever the worst thing is in the crypto community (maybe they discover Hillary Clinton's wallet address or something). This could be enough grey area for most people to not pull a run on ETH. --- (Sorry hit Submit by accident, if you can believe it) Rocket Pool looks, idk it makes me nervous. From a quick read (could be getting this wrong) they're essentially selling their tokens for ETH, but you can't redeem your tokens to get your ETH back unless the staking pool can cover it, which I think they currently can't because the Beacon chain isn't sending ETH rewards yet. So you spend fiat for ETH, and you spend ETH for an IOU. I guess my preference here would be something like a straightforward DAO where people buy shares of a staking operation and there some kind of governance when they want to leave. Anything more complicated than that and my spider sense starts tingling. But as a broader comment, one of the things that makes me (and probably others) suspicious about the crypto space is that it's just littered with small and large reminders of how rich you're gonna get. Like the docs about their rETH token is a green graph going up tremendously with an example of how you're gonna make a 25% profit [1]. Like, I'm not saying all examples should include a losing money case and all graphs should be red lines going south, but there are real MLM vibes everywhere you look. [1]: https://docs.rocketpool.net/guides/staking/overview.html#the-reth-token https://docs.rocketpool.net/guides/staking/overview.html#the...

sanderjd 5y ago

I didn't totally mean that you personally are a Bitcoin maximalist, just that this is one of their arguments. Did you mean extra steps or fewer? Either way, I think it mostly remains to be seen on the centralization question. The newer-fangled PoS chains are certainly more centralized than Bitcoin or Ethereum, but nobody has actually tried distributing tokens broadly through a bunch of years of PoW and only then switching to PoS. It could plausibly end up being quite a bit more decentralized than Bitcoin.

camgunz 5y ago
> Did you mean extra steps or fewer? Eh I was trying to be extra clever but, that's practically a synonym for being opaque. To zoom out a little, I just think these systems have a kind of reverse entropy. Think about all the "decentralized" systems we started off with: email, newsgroups, payments, web apps, State government in the US. They kind of congeal into walled gardens, one and all, and that's probably because frog boiling is very easy (give up an imperceptible amount of control for a hugely perceptible amount of convenience) and the end goal is very profitable. Like, any company would love to be able to scan every Gmail user's email for ad leads. Holy shit. And we let that happen because of... idk search, anti-spam and storage so large you never have to think about it. Maybe a good deal, honestly, I don't know. And we're seeing this happen in crypto right? The pitch of literally every crypto service is "simple and you'll get rich". Well this is the same thing: people are giving up imperceptible levels of control for super perceptible levels of convenience. And sure, that's their choice. And we can laugh in people's faces when they get rug pulled saying "not your keys not your crypto" but that's not gonna win us any friends. And we'll be laughing while the blockchains centralize (as they are already doing, right now). So I think PoW is centralization with extra steps. I think PoS is also centralization with extra steps, but the huge buy-in bakes centralization in right at the beginning, so it's fewer steps than PoW. Crypto was supposed to democratize money and payments! Why is there a $130k entrance fee? And then for those who can't afford that, how many of them will really band together to buy stake shares? How much of that will be a scam? How much of that will be big conglomerates who actually run the nodes, give you your 2% return, but meanwhile they've seized control of the Ethereum network, all while you funded it! So if we're taking crypto's values earnestly, I really do think we have to see PoS as an acceleration towards centralization and a big step backwards. ~~~ I can't even get excited about some potential positive outcomes (PoS happening, energy use declining, centralization also happening, crypto dying, switches to PoS causing schisms, crypto dying, nations banning crypto mining, crypto dying) because so many good, honest people have been hoodwinked into this bonkers scheme and they'll lose so, so much money. And honestly, for what? So banks can't stop you from making an ACH transfer for weed? Seriously, just get out there and vote already. ~~~ Broadly I think this a problem with the fundamental libertarian underpinnings of blockchain currencies. They sort of presuppose that everyone starts from the same place, and then you're rewarded in line with what you contribute to the network. But in the world we live in, there's huge inequality--we absolutely do not start from the same place. So unless your protocol has some mechanism to even things out, it'll just reproduce that inequality. And that inequality has a lot of second order effects. Rich people can buy a lot of mining or a lot of stake. They can afford to start businesses like exchanges or crypto news websites (or buy them after they get popular). They can afford to buy ads pumping their coin, or astroturf campaigns against changes they don't like. They can build services on the chain and collect rent. Same as it ever was. There's this whole conundrum in progressive politics about why some people so consistently vote against their own self interest. There's a lot of reasons, but one I thought was just absolutely wrong was "well, everyone thinks they'll be rich someday"--so they vote against taxes and regulation and such. But that is 100% the dynamic in crypto right now. I honestly don't see any positive outcome from any of this, I really don't.
- sanderjd 5y ago
  This is an interesting comment, thanks! Just to say one thing: something I like about PoS is that it forces validators to keep skin in the game. If validators do anything that screws with the legitimacy of the protocol (like big validators getting together to collude on some nefarious action) then that will affect the value of the asset that they are forced to hold in order to be a validator. So they have an incentive to run the network in the way users expect. FWIW: there is a good (in my view) decentralized staking protocol called RocketPool just launched, which I hope will be popular among those who don't have $130k.
  - camgunz 5y ago
    Yeah, that is a big difference between PoS vs. PoW where damaging the network damages you a lot more financially. You can cash out PoW earnings more or less immediately and then corrupt the network, whereas with PoS your stake is what lets you corrupt it. Someone else linked a thread that was like, "the buy-in for PoW is pretty high too, you gotta burn $15k-$25k on an ASIC mining rig...", but that's obviously peanuts compared to $130k. I'm not so sure it's a given that corrupting the network outright destroys it though. That defense mechanism assumes at least a few things: - Enough people would notice - Enough of those people would sell their ETH as a result - Enough of those people would sell enough of their ETH I think it's pretty plausible some off-chain action would occur instead, like a fork or some governance issue. It seems unlikely that the majority of ETH holders would participate in a mass sell-off that would bankrupt many (most?) of them, to say nothing of the social (my whole life is ETH) and investment (my whole business and the businesses/careers of all my friends are ETH) costs. You could also imagine a conglomerate doing this for "noble" reasons. "We reversed transaction Y because they're child pornographers" or whatever the worst thing is in the crypto community (maybe they discover Hillary Clinton's wallet address or something). This could be enough grey area for most people to not pull a run on ETH. --- (Sorry hit Submit by accident, if you can believe it) Rocket Pool looks, idk it makes me nervous. From a quick read (could be getting this wrong) they're essentially selling their tokens for ETH, but you can't redeem your tokens to get your ETH back unless the staking pool can cover it, which I think they currently can't because the Beacon chain isn't sending ETH rewards yet. So you spend fiat for ETH, and you spend ETH for an IOU. I guess my preference here would be something like a straightforward DAO where people buy shares of a staking operation and there some kind of governance when they want to leave. Anything more complicated than that and my spider sense starts tingling. But as a broader comment, one of the things that makes me (and probably others) suspicious about the crypto space is that it's just littered with small and large reminders of how rich you're gonna get. Like the docs about their rETH token is a green graph going up tremendously with an example of how you're gonna make a 25% profit [1]. Like, I'm not saying all examples should include a losing money case and all graphs should be red lines going south, but there are real MLM vibes everywhere you look. [1]: https://docs.rocketpool.net/guides/staking/overview.html#the-reth-token https://docs.rocketpool.net/guides/staking/overview.html#the...